Everywhere, people discuss saving the planet, reducing plastic use, or planting trees. However, some are taking action beyond mere talk. They are putting their money into actions that help the earth. That's where green loans come in. If that term sounds new, now is the time to understand what it means and why it matters.

A green loan is a type of loan specifically designed to support environmentally beneficial projects. That means the money from a green loan must be used to help reduce pollution, save energy, or protect natural resources.

This is not just any regular loan. It is not intended for purchasing a new phone, travelling to another country, or paying school fees. It is only for things like installing solar panels, purchasing energy-saving appliances, or building a home that conserves water and electricity.

When someone applies for a green loan, the lender (usually a bank or financial institution) verifies that the funds will be used for an environmentally beneficial purpose. If the plan doesn't fit, the loan won't be approved.

Green loans function like regular loans. You borrow money, you use it, and then you pay it back over time. But there are a few key differences.

Before giving the loan, the bank wants to see that the project is truly green. It must adhere to what is known as the "Green Loan Principles." These include:

A clear plan for how the money will be used

A way to measure the benefits of the project

Reports or checks to show that the loan is used properly

If someone wants to build a house using solar energy and water-saving systems, they must demonstrate how the house will function and specify the tools they will use.

Because green loans help protect the planet, some lenders offer them with lower interest rates. They are doing this to encourage more people to adopt clean and safe practices. But not all banks do this. Some charge the same rates as regular loans.

Still, some governments and organisations offer bonuses, such as grants or tax cuts, to support green projects. That means the total cost of using a green loan is cheaper in the long run.

Green loans come with tighter rules. There is less room for playing games or pretending. Some lenders will continue to monitor the project even after the loan is disbursed. If the borrower breaks the rules or misuses the loan, it can be cancelled. The borrower may have

been required to repack more quickly, not to punish anyone, but to ensure the loan benefits the environment — just as planned.

People use green loans for various purposes, which benefit LPS and the climate. Some common uses include:

Solar panels: Installing them in homes or offices to get clean energy from the sun.

Electric vehicles (EVs): Buying cars that use electricity instead of fuel.

Home insulation: Making a house warmer in winter and cooler in summer without using much power.

Energy-saving lights or machines: Replacing old devices with new ones that use less energy.

Rainwater collection systems: Saving water by collecting rain for later use.

Some farmers also use green loans to adopt eco-friendly methods, such as drip irrigation or natural fertilisers. Business owners can utilise them to reduce waste, enhance recycling, or decrease plastic usage.

Some people may think, "Why should I care about green loans? I want a better life." But here is the hard truth: without taking care of the planet, there may be no better life in the future. The air is getting hotter. Floods and wildfires are getting worse. And food is becoming more expensive. These things are real.

When people invest in green projects, it's not just the planet that wins. They win, too. A house with solar panels pays less for electricity. A car that runs on electricity saves money on fuel. A farm that uses water more efficiently grows more food during dry seasons. These are real benefits.

Some people are quick to complain that the world is broken. Yet when they get the chance to fix a part of it, they walk away. Maybe it's because they don't trust the system. It may be because they seek quick money rather than long-term gain. But green loans are one of the ways real change can start.

Not everyone will qualify for a green loan. Lenders check credit scores, income levels, and ability to repay — just like with standard loans. But beyond that, they look deeply into the project plan. They want to see:

Is this project truly green?

Is the plan clear and ready?

Can the person or business effectively manage the project?

If the answers are good, the chances of getting the loan are higher. Still, the green label alone doesn’t make a project good. It must also make sense and show real results.

Not every loan labelled as "green" is genuinely beneficial. Some companies are using the word to appear more credible. That is called "greenwashing." It's when something is sold as eco-friendly, but in truth, it does very little or even causes harm.

This is why it's essential to read the terms, ask questions, and verify the lender's track record. A genuine green loan will have rules that make sense, plans that show results, and systems to track progress.

Also, people should not borrow just because the loan is “green.” If the plan is not ready or the money may be wasted, it’s better to wait. Being smart is better than being fast. Green loans are a tool — not a magic fix.

Everyone says they want change, but change takes effort. Green loans are one way to bring real action. But action must come with planning, honesty, and a clear mind.

The best thing about green loans is that they don't only help one person. They allow the air, the water, the soil, and the next generation to thrive. And even if some people don't care, that doesn't mean others should stop trying.

Whether it’s a big project or a small one, a clean home or a cleaner car, each step counts. Because at the end of the day, no one can eat money when the land goes dry. No one can drink fuel when the rivers run empty. And no one will sleep well in a world on fire.

Before rushing to borrow new clothes or flashy gadgets, consider thinking differently. Use the money to build something that lasts, something clean, and something that brings peace not just to the wallet but to the world.